For the past several months I have been hearing a lot of complaints about the FDIC giving away “taxpayer money” in the sale of IndyMac last year and how the agency was encouraging foreclosures and short sales because of loss sharing agreements with the buyers of dead banks.  Now there is a video circulating in the matrix that purports to show that the FDIC gave away a lot of taxpayer money to George Soros and various other investors as part of the resolution and sale of IndyMac to OneWest.

The chief source of these reports is from TBWS, which supposedly reveals how Goldman Sachs worked an unreal deal with the FDIC. (Here http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1559781)

Martin Andleman touched on this in his “Bringing Up the Rear” column highlighting George Soros back in October of 2009 (Bringing Up the Rear: Liberal Billionaire George Soros).

Unfortunately these reports are wrong. As is often the case with generalist writers, these people got most of their facts wrong or got no facts at all.

Last Friday, FDIC Director of Public Affairs Andrew Gray said:

“It is unfortunate but necessary to respond to blatantly false claims in a web video that is being circulated about the loss-sharing agreement between the FDIC and OneWest Bank. Here are the facts: OneWest has not been paid one penny by the FDIC in loss-share claims. The loss-share agreement is limited to 7% of the total assets that OneWest services, and OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets. In order to be paid through loss share, OneWest must have adhered to the Home Affordable Modification Program (HAMP).

The producers of this video perpetuate other falsehoods. The FDIC has not requested to borrow money from the Treasury Department. Indeed, we continue to be funded by the banking industry through assessments, not by taxpayers as claimed in the video.

This video has no credibility. Regardless of the personal or professional motivations behind its production, there is always a responsibility to be factually correct and transparent. The FDIC made available a fact sheet on the day that the sale of IndyMac was announced that details the terms of the contract. It’s too bad that the creators of this video opted to premise it on falsehoods.”

Supplemental Fact Sheet

Category: Bailouts, Credit, Regulation, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

One Response to “Why “The Indymac Slap in our Face. 02.08.10″ is Pure Baloney”

  1. omalleyll says:

    Chris Whalen: What is your basis for disputing the information provided in the TBWS video? The FDIC press release states, “OneWest has not been paid one penny by the FDIC in loss-share claims…OneWest must first take more than $2.5 million in losses…”. The FDIC never disputed the math or the probability of the eventual payment to OneWest.

    Your article states you “have been hearing these complaints for months”. The TBWS video is recent. What other sources are you discrediting?

    As a taxpayer, consumer and depositor of banks, concerned citizen, and borrower of a failed bank- I wonder if your article answers the question in your headline… “Why “The “IndyMac Slap in our Face Video” is Pure Baloney”. Why is it baloney?